LIVE BLOG: Netanyahu's coalition talks enter final stage

Party leaders, including Naftali Bennett and Yair Lapid, are expected to work out the final details of coalition deal after late-night meeting fails to yield consensus on on all issues of contention; For first time since 1951, there will be no ministers without portfolios.

Prime Minister Benjamin Netanyahu met with Yesh Atid Chairman Yair Lapid and Habayit Hayehudi Chairman Naftali Bennett on Monday afternoon, after a late-night negotiations marathon failed to yield resolution on some of the final disagreements delaying the formation of the next Israeli government.

The issues left on the agenda include the appointment of an education minister, the number of ministers and deputy ministers who will compose the next government, and the distribution of portfolios among the coalition partners. A final agreement between the three parties is expected to be announced by Monday night.

10:36 P.M. Yesh Atid estimates it will have less than eight deputy ministers: "If we don't appoint deputy ministers and Habayit Hayehudi doesn't either, the number of deputy ministers will be even lower," party officials said. Since the number of ministers is not yet final, but they can still raise it to eight, it is unclear whether the small number of ministers will reduce the state budget.

The cost of a minister without portfolio is almost identical to the cost of a deputy minister: around NIS 2 million annually, not including varying operational costs.

9:48 P.M. The third Netanyahu government is expected to make a bit of history: For the first time since 1951, there will be no ministers without portfolios in the next coalition. This is largely the result of pressure from Yesh Atid head Yair Lapid.

The cost of funding a minister-without-portfolio position is NIS 2 million annually. The outgoing government has at least six such ministers and in 2012 alone, funding such positions cost NIS 100 million.

9:11 P.M. Likud officials said it appears Kadima head Shaul Mofaz will not be appointed a minister in the third Netanyahu government. According to one official, "Kadima has only two MKs, which doesn't reach the new quota required for appointing ministers to the government. I don't see how Mofaz can be appointed a minister in the upcoming government. The question regarding appointing another minister from Hatnuah is still on the table. Likud is coordinating this issue with Tzipi Livni. It's highly possible that the party will be forced to give up the Environmental Protection Ministry and receive a deputy ministerial position instead."

According to the officials, "Reuven Rivlin shouldn't complain. He served two terms as Knesset Speaker, so there is no reason he cannot wait a year and a half as an MK before being appointed president."

7:30 P.M. Likud sources say party officials are insisting that they hold on to the education portfolio. "The Education Ministry, headed by Gideon Sa'ar, had many accomplishments in the past four years and the prime minister would like Israeli students to continue to succeed, as was seen in the international exams in which they made the top 10 in the world."

5:58 P.M. Sources close to the coalition negotiations told Haaretz that the next Netanyahu government will include solely 20 ministers, a significantly smaller number that in past governments. According to the officials, the negotiating teams are continuing to work out which portfolios each party will receive.

3:54 P.M. Habayit Hayehudi officials stress that they will not allow a settlement freeze as part of trust-building measures that the next government will make as a gesture to the Palestinians. "Habayit Hayehudi is entering the coalition in order to be part of it, not to leave it within weeks," said a senior official in the party. "Everyone knows that we will not allow a freeze on settlement construction. The freeze was never a precondition to talks – except for the one-time move Netanyahu carried out."

"Instead of freezing construction, the government can work to release prisoners or transfer funds to the Palestinian Authority. We will not dismantle the government over such steps," he said.

12:33 P.M. Yesh Atid officials state they won't agree that the party be put in charge of fewer than five ministerial portfolios. This is the number of portfolios that would be assigned to the party if the government consisted of as few as 18 ministers, they say.

12:17 P.M. Netanyahu meeting with Bennett and Lapid postponed to 1 P.M. Among other issues, they are expected to discuss ways to further decrease the number of ministers in the next government, including the possibility that each party will give up one ministerial position. Meanwhile, Netanyahu and Avigdor Lieberman are expected to look into ways to cut the number of deputy ministers in the government, which currently amounts to eight.

12:07 P.M. MK Rivlin (Likud) reacts to statements by members of his own party who criticized Netanyahu for seeking to appoint a new Knesset speaker. "I have to thank my party for allowing me to hear my own eulogies while still among the living," Rivlin says.

11:15 A.M. Sources familiar with the coalition talks say that the parties have settled on most of the contentious issues, including the conscription of the ultra-Orthodox. The upcoming meeting will deal with the allocation of portfolios. Yesh Atid insists on heading the Education Ministry, while the Likud has made it clear it won't be allowed to do so. Likud officials are pursuing a series of incentives, including the allocation of a generous budget for social issues, meant to convince Lapid to let go of the education portfolio.

9:15 A.M. Outgoing Minister Michael Eitan (Likud) blasts Netanyahu for his decision to dismiss Rivlin from his position as Knesset speaker. "What bothers me isn't the personal aspect, but the message [that is being sent]," he tells Army Radio. "The moment everyone starts to operate under the orders of one man, even if he is the prime minister, a power pyramid is created. This situation is undemocratic."

8:00 A.M. Netanyahu, Lapid and Bennett schedule a meeting for 12 P.M.

4:00 A.M. Meeting between the Likud-Yisrael Beiteinu, Yesh Atid and Habayit Hayehudi negotiating teams concludes. Only part of the issues on the agenda have been agreed upon, sources close to the talks say.

12:25 A.M. Meeting between Netanyahu, Lapid and Bennett concludes. The parties' negotiating teams convene to draft the details of the understandings reached in the meeting. The process is expected to last all night. Lapid and Bennett remain in Jerusalem in case they are urgently needed.

11:25 P.M. Sources in Habayit Hayehudi and Shas tell Haaretz that Netanyahu's aides have approached the two parties to explore the possibility of getting them to join the coalition while leaving Yesh Atid out. The initiative, which never came to fruition, was meant to serve as an alternative should the deal with Yesh Atid and Habayit Hayehudi fall through.

10:48 P.M. Likud, Yesh Atid and Habayit Hayehudi officials postulate that the nighttime meeting with Netanyahu will yield a resolution to the disagreements between the parties and pave the way toward a coalition deal in the coming hours. "At this time it doesn't appear as though a crisis is imminent," a Likud official said.

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